Samsung prepares for Apple Pay battle with LoopPay acquisition

18 February 2015 | 17538 views | 9

Samsung has agreed a deal to buy mobile wallet outfit LoopPay, giving the electronics giant a new weapon in its brewing battle with Apple for the m-payments market. Financial terms have not been disclosed.

LoopPay's patented technology turns existing magnetic stripe readers into contactless receivers. On its website, the firm boasts that this means that it can work with around 90% of existing POS terminals, compared to just five percent for Apple Pay.

Samsung has been working with LoopPay since joining Visa in a funding round last summer. In December, Re/code reported that the two firms were working on an Apple Pay rival ahead of the launch of the Galaxy S6 handset this spring.

LoopPay founders Will Graylin and George Wallner will work with Samsung’s mobile division as it seeks to tap the startup's Magnetic Secure Transmission technology to "drive the next wave of innovation in the digital smart wallet," says a statement.

David Eun, EVP, global innovation centre, Samsung, says: "We are excited to take our relationship with LoopPay to the next level, by bringing consumers a mobile wallet solution that is not just safe and reliable, but also widely accepted at more locations than any competing service."

Comments: (9)

So this means that merchants would net a refitted mag stripe terminal to be able to receive "samsungpay" contactless payments AND a emv chip enabelled NFC capable terminal to accept "applepay" including any emv plastic chipcards with NFC from issuers of Visa
or Mastercard cards. Or a new hybrid magstripe + applepay capable emv chip terminal with nfc capability if the desire is to "accept all" with the preserved ambition of one acceptance technology infrastructure. With something yet unknown in order to accept
"xmobilepay" as well for sonys, huaweis... All this effort to accept my payment with my Visa or Mastercard - which today works with physical cards with mag stripe + emv chip? It would most likely speed up the infrastructure deployment if the mobile handset
giants and the card schemes would find out one solution. In the meantime mobile handset card payments are not likely to arrive to a shop near you any time soon...

It is amazin that when the mobile payments is the subject: compare to Banks; Phone manufacturers - Technology Companies - GSM Operators - Start ups and even Coffee Chains are much more agile, innovative and flexible. I think this means in very near future
THE PAYMENT BUSINESS profits of the banks either significantly get lost or if we are lucky, we will share our cake's big part with the new comers, who were not our competitors once! I think we can call this DIGITAL DISRUPTION TO BANKING. Sure there are some
possible counter moves the banks can move - provided that it was well understood and executed.

Take a look at http://www.looppay.com/faqs/. It seems that this is a wireless interface to the magnetic stripe reader so that the mobile device can appear to be providing a magnetic swipe. This should not be confused with an EMV compliant contactless
payment which includes security features such as transaction cryprograms and card authentication.

I know a cardiothoracic surgeon who picked up a stake in a stent manufacturer. Maybe Visa is following a similar hedging strategy by investing in LoopPay?

LoopPay is an innovative solution for a today's problem - old or new, magstripe dominates USA. Anecdotally, such solutions have gained mainstream adoption faster than wannabe innovative solutions searching for a problem.

And, in any case, what's to stop LoopPay from coming up with an EMV-compliant version of its technology by the time the installed base of EMV terminals achieves critical mass in USA?